tv Your Business MSNBC July 7, 2012 2:30am-3:00am PDT
hi, there, everyone. i'm j.j. ramberg and welcome to "your business." where we give you tips and advice to help your business grow. what better place to do that than here at the 2012 "new york times" small business summit. small business owners, investors and business journalists have all gathered here today to network and talk about pressing issues like funding, marketing and utilizing social media. ♪ the majority of small businesses shut down before being around for five years. only a third of them make it to ten years. so what are the odds then of a company being around 150 years through five generations of the
same family? well, you're going to love meeting the mcalisters. a new york family that knows how to beat the odds. >> okay, jeff, haul the line in. ellen is getting in position. okay. >> brian mcalister's family name as dotted the new york harbor since 1864. we are the only company that lasted for 150 years in the family. and before that, you got to be lucky. >> that was the year his great grandfather james mcalister started mcalister towing helping big ships navigate to shore. do you think it is business sense or pure luck it's been in the family that long?
>> there are several things that have to happen. one, you can't make too much money. if you make too much money, everybody wants to sell it and get rich. if you don't make enough money, they leave. >> you might say he's found a sweet spot for the company. somewhere between too much success on the one hand and too much stress on the other. >> the most efficient boat in the world that alines like a yacht. >> james mcalister started the company in new york's south seaport as a loan immigrant with a single cargo boat or lighter he launched a business big enough to support himself and three brothers. >> here we have mcalister towing. >> by the turn of the century, the next generation expanded the business beyond cargo to passenger ships, tugboats and towing. as the new york port expanded. the family diversified into new areas with different branches going into different maritime businesses. all with the mcalllister name.
>> when my great grandfather died, he left these boats to one of his brothers, all right? and my grandfather, who was his son and had four boys, they got this. these steam boats with the paddle wheels were enormous business. >> in the great depression the mcalisters nearly went bust. by 1938 brian's great uncle died with just a few boats to his name. >> he watched everything go to pieces. two or three people left in the office. the only thing they took home was grocery money. that was it. there was no salaries no more. this very, very successful business went to near zero. >> in his own lifetime, brian mcallister said he's gotten close to losing the business several times. the first when his father and uncle were going to sell it off
for retirement rather than give it to him. >> i said, you can't do this to me. you can't sell this business. >> brian's generation eventually convinced them but it wasn't easy. >> there's ban been a lawsuit every time this company got transferred from the first to the second and the second to the third. >> by the late 1980s brian's second son faced a different threat. >> the company was basically bankrupt in 1981 and i graduated in 1982. they just barely hung on. >> eric mcallister remembers a twin set of pricing that nearly got the fifth generation the legacy. the first was financial. shortly after that the second crisis was a violent union strike which also came close to destroying the business. >> sitting here at my desk, in comes walking the president of the union. he said, brian n a couple of weeks i think you understand that your union contract is up. i said, but al, if you go on
strike, keep on walking. because that's the end of your union and us. i'm bringing in replacements. and they are heavily armed. so if you want to come aboard with your thumbs and the clubs and the guns, you better know that every single one of our tugboats is ready to take you on. i got no choice. i may be dead either way. >> clearly luck has played a role in their survival, but it is certainly not everything. what is it about your family that's been able to hold on to this with so many other family businesses leaving the family after the second, third and fourth generation? >> i think it's that irishmenalty of tradition, the passion for tradition. they just want to hold on to it and they just don't need that much money. >> 53-year-old jeffrey mcallister's is eric's third company and a fifth generation
business. >> a family runs on passion more than business sense. >> today jeffrey is a pilot and boards the cargo vessels through new york harbor and commands the fleet of mcallister tugs as he guides this safely to the dock. we left the tugboat and went to company headquarters to ask eric about the company's success. >> one of the things we have observed about why this company survived is that there have been pieces that you can break off. you know, if you own a little bit of your supply chain and you have a relative who might be interested in some of that vertical or something that's off on the side, you can break that piece off and keep the lineage going. we have had a lot of those pieces over the years. >> at the age of 80, brian is the last living member of the fourth gin ration. and he's making plans to pass the company on to his sons. beyond that, however, he says the legacy is not his concern. in your dreams, how many more generations keep this company?
>> hey, once your dead, okay, i don't dream about what could happen two more generations from now. that's my sons' problem. earlier today at the "new york times" small business summit i hosted a panel called where's the money, where you talk about where to find funding and what you say when talking to someone who has money they might be interested in giving you. now i have joining me two of the people who were panelisted of that. brian cohen is the chairman of new york inale angels. you say many entrepreneurs with ideas to pitch you and brad harrison, founder of bhv, great to see both of you guys. thank you for joining us here. we talked to a lot of people who were in different stages of their company. some looking for start-up, some more mature, but what is
something, when somebody comes to you to ask for money, what's one thing you always look for? >> i would say more than anything, deep insight on how the customer will benefit from their idea and process, whatever the service they may be providing. how well do they know the customer and have they spent enough time with them? >> someone who comes on the show a lot said to us, you should describe not the benefit your company is doing but the pain it's solving. does that make sense to you? >> absolutely. i think the opportunity comes from people creating products and services that solve a problem. in today's day and age where everything is coming for digital and more interconnected, there's more opportunity to figure out how to use that data to solve problems that have been plaguing us for lots of years. >> how much of your decision has to do with the idea versus the person? >> i think you know my philosophy is 110% on the people. and i think you know within the first couple of minutes if that person exhibits the values that
you're going to look for in somebody that you're going to work with for a long time. >> i would say 75% of the time somebody isn't doing what we invested in them a year later. they have integrated, listened closely to the needs of the customer, they did the fine-tuning, but we certainly look for the leader, they are the ones doing the integrated. they are the ones doing the eliciting. they have to be able to do that. >> i'm a person who thinks they have a fantastic idea and am going to talk to you. what can i do to show you i'm a smart person, will reiterate if i need to? >> the biggest thing is do your homework. know what we invest in, what other companies we invest in. the beauty of being an entrepreneur today you have the amazing source of the internet. you have all this information available to you. so i look for somebody that comes in prepared and knows a little bit about me and what i've done and what i look for. >> i'm so driven by their
relationship to the customer always. if they get some deeper insight, that they learn something, have they adopted their business to some unique capability that no one else has recognized? i'm not sure i believe the issue about pain, sort of the easy way of saying, what pain. the best companies are the ones that look at a challenging problem and figure out how to solve it, but it doesn't have to be painful. they have an easy way of the offer to a customer with a better solution. >> we used to talk while i was in business school we wrote so many business plans that were this thick. today are people handing you business plans? >> they still do because they are coming out of business school and are told to. so we do get a lot of them but we don't read they will. we will look at them after we decide if there's a possibility of investing to see if there's more depth to the concept of the idea, but we look at the depth they create. that could be 12 to 15 pages, that's it. >> we focus on the powerpoint
and what it says in there. i think what's important about the business plan is not actually what's in it but going through the business planning process so that you have identified your competitors, your market, your product, your revenue. all of the critical things. a business plan is just a structure to help you think through all those things. >> in much more ways it is for the entrepreneur. >> correct. >> you get approached all the time, you have money and want to give it. a lot of people want money. if i were to send you an e-mail, what is something to say in the subject line or first line of the e-mail to get you to say, oh, this is worth reading on? >> i figured out how to fix a problem that exists. and i figured out how to execute on that problem in the easiest way. i think it's a big problem. it got my attention. >> i think it's having some sort of number or something to show some tangible traction in
whatever they're proposing. >> my best investments so far have been in company that is had no traction. finding pinterest, they had no traction. >> thank you so much for coming on the program and hopefully we'll see you back in the studio some time soon. >> thank you, j.j. we have spoken a lot on the show about how to create a brand, but then once you create it how do you actually gain traction with the brand. that's one of the big topics here at the "new york times" small business summit. we have a panel here, joining me is adam rich, co-founder and editor and chief in the popular online and restaurant site, thrill list. and joining me is this woman here as well. when you started thrill list, how much did you think about brand? >> you know, i think without even really knowing to call it brand, it was something we were really very focused on out of the gates.
i started it not really as an sbren preyou are in entrepreneur but the audience. it has targeted city information for a post-college guy. i was living in new york and feeling the real lack of thing that is were evaluated and filtered for my interests. so a lot of what i took that position to be ended up becoming our brand. >> so it seems almost easy because the brand is in essence your life, your desires and what you're interested in. if you have a company that is not so reflective of yourself, how do you go about thinking about what the brand should be? >> well, it's exactly right to do it that way. you have to really think about first and foremost your customer, who is the ideal customer, what do they want, care about and desire. and always being empathetic and putting yourself in their shoes based on their needs. then you can provide the service or the product that's going to fulfill that need and offer the benefit that they need.
>> as you've grown, have you changed the brand at all? has it evolved? >> i think we have changed the brand quite a bit. i think that we have had some really exciting evolutionary moves, but it's been interesting because our tact has been different than a lot of other companies take. we stay laser focused on our audience and on the sort of lifestyle that we were always serving but found new ways to access its support. so we bought about two years ago a met shopping club because we found that our readers were similarly kind of lost on the internet trying to find play places to buy clothing as they had been lost on the internet trying to find information about their city before we started our editorial. it was sort of an extension of that initial promise to help whittle things down and curate the internet into something they care about. a year ago we launched a local experiences platform for a lot of the same reason because we saw all the deal sites popping up and realized our audience didn't care about $15 worth of domino's pizza for $8. these were 28-year-old guys who
wanted other things and wanted exclusive experiences more than dealing with discounts. >> so this makes me think, maria, if you start something focused and start a company and are laser focused on whatever that is, you have a brand around this thing. >> right. >> then you extend to offer other services and other products, how does that work? it seems to have worked with you guys, but do many people then have to kind of jigger their brand? and how do they do that? >> you can come at it from two ways. whereas they are still serving the same target audience but offering different products or services. sometimes you may continue to offer what you offer of value but you might be targeted a different audience. in that case, you have to evolve your brand and evolve your messaging and perhaps your visual identity to speak to that new audience and communicate the benefits to a new group of people. so it all depends on the you're going after a new audience or are you giving away new products and services? >> i think as a small business person that i began a discussion on brand and it is petrifying.
because you have something that may be working, maybe not as well as you think it is, but when you change it you're being very deliberate and saying, okay, whatment am i changing this to? and uh-oh, i hope it works better than i have right now. how do you decide it's going to work better. >> maria and i just talked about this before coming up here. there are a million exercises that you can do, focus groups and look at data and market information, but at a certain point there are so many variables and it is sort of petrifying. to a certain point you have to decide you're going to commit to trying something and recognize that there's a chance it may not work and be ready to pivot and shift and continue refining. i mean, it is all kind of interim. there are so many things to consider that you kind of just at a certain point go with your gut and give it your best shot. >> i think a big thing you can do is especially an existing business is talk to your current customers and use them as a resource so that your best customers, what do you like
about us? what are you buying from us? why do you keep talking about us, but then you can talk to those maybe not as satisfying and say, what didn't we provide for you? what else can we provide of value? that can help you make decisions if you need to evolve the brand or not. >> you guys, thank you so much. we have an office across from you, so i have seen you go from this much space to this much space to this much space. congratulations. thank you for all your advice. enjoy the rest of your day here. >> thanks. >> thanks a lot. when we come back, some of the movers and shakers here at the summit answer questions posed by attendees. and the sweet sounds of excess success as ron shares his wisdom in this week's "learning from the pros."
not many musical manufacturers have become household names, but surely you have all heard of stinemam pianos. we recently sat down with the company's president to talk about the wisdom he's used to guide this brand in this week's "learning from the pros." ♪ steinway and sons builds a piano to a standard, not a price. that's an unusual approach to marketing products. everything is centered around this particular quality of the piano and i could talk about many piano companies and other consumer products company who is have deviated and had a great brand and deviated from that course and then the quality kind of went down. then unfortunately it was not a very good scenario for their demise or where they ended up in
the market. but for us we build this instrument always to improve it, to make it better. but not to build it to a pricepoint. ♪ >> a new york-based company has been a blessing for us because this is a very large labor market, a very large immigrant market, and year after year generation after generation when people would come to new york looking for jobs, they would have the ability to work with their hands and because steinway is based here it allows us access to all these individuals and they brought with them good woodworking skills. but it boils down to create agricultural of excellence for everyone who builds our piano, whether they are sweeping the floor or the tone meister at the end. they need to understand the relevance of what the steinway piano means within sotsz
society. the steinway artist program, over 1,600 artists that play the steinway piano exclusively send us a report card every year, if you will. because these individuals can play any piano they wish to play, and we don't pay them to play the piano, but they choose the steinway piano because they believe it is best for their craft or art. by listening to this group of artists and institutions around the world, we take the feedback to improve our pianos incrementally every year we build them, so they are a crucial ingredient to the quality level of the steinway piano. ♪ >> steinway, whether 100 years ago or today, is linked to the fabric of societies around the world. i am often just heartened when i travel around the world and to find out that the steinway brand means the same thing in new york as it means in beijing whether
this means in kaz i can stan or rome. it means a stamp of excellence. and we have really stuck to what we do. how many companies who started back 159 years ago building a particular product are still building that same product today? that n my words speaks volumes. ♪ throughout the day here at the summit we have been collecting questions from the attendees, the questions they have about running their business, and now we have our panel to answer some of the questions. reba lasonski is the founder and ceo of grow biz media. and alexi is the leader of the personal and finance website for women. thank you so much for joining us. >> thank you for having me. >> the first question comes from annette. >> if you have a dynamite branding story but the company does not have strong enough distribution, do you resist the temptation to go out with your
story about it first and only? >> this is tricky. when you start a company you're excited to get it out there, but if people can't buy your product or service, do you wait until you have distribution? >> i think it's a combination. i think a lot of people spend too much money on branding up front and have nobody to sell that brand to. so it's a lot of wasted money, but i think also if you spend a little bit on branding it's going to help you get more distribution because more people are going to hear about you and go, oh, i want part of that. so it's the balance of not throwing it all in too quickly. because it's the thing about disappointing people with mail order, everybody orders it and they get the thing, they don't have enough and will never order it again. >> the thing about distribution is you can always have a website that people can go to. >> i would take it a little differently and say you have a fantastic branding strategy and your distribution is not ready to go, you're not leaving the office. distribution is everything. it is so critical to make sure your customer has a fantastic
user experience, they get products on time n the right places that you don't run out, so i think it is important that you really hone in on the distribution strategy. how are you literally going to sell your products to your customers? then branding, also important. then it is time to really focus on the branding strategy. focus first on distribution and then really hone in on branding. >> let's move on to the next question. this is about social media and marketing. >> if you think there's such a thing as too much involvement in social media without annoying your customers. >> is there a point where -- >> there is. you have to be really careful because there are so many networks out there. so today i think the problem is a lot of people automate the social media feed so you're not even aware of how much you're bombarding the customer. >> how do you gauge whether you are doing too much or too little? >> i would add to that that you can't sell on twitter, it's really important. twitter is a place where people go to consume content to learn, so it is really important you're actually sharing really good content with your customers. it shouldn't be, hey, we are in
the press today, here's what we are doing. here's discounts. it really needs to be the important content. things that they want to learn about, they want to read about, personal finance sites making sure our customers on twitter are up to speed with everything happening in the personal finance and how it can affect them or discounts they should know about. >> how do you decide how often to do it? when is it too much or not enough? >> they recommend you tweet 15 to 20 times a day starting at 7:00 in the morning and ending at 9:00 at night. >> finally, a question about working with corporate clients. >> how do i get the corporate communications departments of these consumer goods companies to allow us to issue a press release saying we are getting new business from them? >> so if you're working with a corporate client, it might be a big deal for you, a smaller deal for them. so how do you get them excited about releasing something? >> sure. i actually learned something totally the opposite, instead of trying to get the big companies to issue a press release, learn about press releasing.
it's particularly given with new startups and media, the media is often interested in what the younger companies are doing over the big companies. maybe start stressing out so much about getting them to release something and focus on your pr strategy about you releasing something. >> so here's the other side of that question then, which is how do you get them to approve it fast enough? >> i mean, that takes time. i always start everything we work with with big companies months in advance so we have the time so i'm not up to the hour getting them to approve something. we get it approved weeks before. >> i think what we always learn about targeting this high up in the organization, is in this case i would target as low down in that department. someone who either has the right to say yes or has the path to the person who will. and if you engage with them, make them feel important, make them feel invested in the whole operation, they will run the mile for you, get that approval and you're not going to bother
people who don't really care. high up, they don't care. >> alexa and rieva, thank you for answering the questions. enjoy the rest of the day of the summit. >> thank you so much. after a conference like this, you're sure to come home with a pile of business cards to make sure they don't get lost in the shuffle ek, check out our website of the week. contactme.com helps busy entree me you are ins consolidate and manage contacts and save valuable time. you can also add personal notes to every entry so you never forget where you met them and what you talked about. contactme's built-in calendar sends you daily task reminders so you won't forget the meetings you set up with your new contacts. to learn more about today's show, click on our website. openforum.com/yourbusiness. you'll find all of today's segments plus web-exclusive content with more information to help your business grow. you can also follow us on twitter, @msnbcyourbiz. don't forget to become a fan of